Australian ICT wins big with science skills

Justifying the economic impact of science investment.

Telecommunications network operators and computer system designers are in the top ten industry sectors in Australia for harnessing scientific knowledge and skills for economic gain.

This finding is part of a landmark economic report commissioned by the Office of the Chief Scientist and the Australian Academy of Science (AAS).

The report responds to the continued squeezing of Australian science by federal policy.

After a federal budget that slashed funding for scientific institutions including the CSIRO, NICTA and DSTO; and pared back programs such as cooperative research centres (CRCs) and Australian Research Council (ARC) grants, Australia's scientists have been looking for a way to justify continued investment, particularly of public funds.

"The contribution of science to the Australian economy, particularly the advanced physical and mathematical sciences covered in this report, is easy to take for granted," Australia's chief scientist Professor Ian Chubb and AAS president Professor Andrew Holmes said in the report's foreword.

How the numbers stack up

The report calculates what it calls "direct" and "flow-on" effects of advanced physical and mathematical sciences.

These are taken by the report's authors to be physics, chemistry, earth sciences and mathematical sciences, while the reference to 'advanced' means "science first applied in the past 20 years."

The authors note that biology and life sciences are not included in their calculations.

Science input is thought to directly - and conservatively - add $145 billion to Australia's economy, which is equivalent to a bit over 11 percent of Australia's economic output.

This is thought to have a flow-on effect that adds $147 billion in value to the economy – for a total impact of $292 billion, or 22.5 percent of our economic output.

That impact could be even greater, if conservatism factored into the equation is set to one side.

"While the most likely magnitude of the total impact ... on the economy is equivalent to 22.5 percent of output, we think that the true magnitude of that impact lies between 17.5 percent of output and 28.1 percent of output," the report notes.

What this says about the future

And this is where it gets tricky.

These numbers are drawn from 20 years' of historical data – which makes extrapolating future trends from the findings somewhat challenging.

The report itself is lax to put numbers around what could happen to Australia's economy if science continues to be devalued.

It simply asks us not to go there.

"While our estimates represent a historical snapshot, it is reasonable to infer that a future without continued scientific development would involve lower economic growth simply because the proportion of growth that would otherwise come from growth in knowledge would be reduced," the report states.

"While the exact magnitude of that reduction (in terms of annual growth, for example) cannot be inferred from our estimates, a 17.5 percent to 28.1 percent reduction over a period of at least 20 years would be a substantial potential loss.

Around six industry classes sit in the IT or telecommunications sector – and half are in the top ten for making money from the application of scientific knowledge and skills.

The biggest economic winner from science research and skills in Australia over the past two decades has been oil & gas extraction; iron and gold mining operators come in third and fourth.

However, wired telecommunications network operators are considered to be the fifth largest beneficiary in economic terms of such knowledge and skills. The value such operators derived is estimated to be worth some $6.6 billion in 2012-13 alone.

"Advanced mathematics and physics provide the knowledge that underpins the provision of some telecommunications services, including mobile phones and wireless internet," the report said.

"The direct impact of this knowledge is the value of such services sold by telecommunications companies." The flow-on impact, it said, was in productivity gains and "consumer savings" from improved methods of communication.

Also in the top ten, "computer system design and related services" are thought to have gleaned $4.8 billion in economic value from scientific knowledge in 2012-13, while "other telecommunications network operations" are estimated to have derived a $4.2 billion benefit.

Outside the top ten, other ICT industry beneficiaries are thought to have been:

"The priorities simply recognise that some of our research funding should be spent identifying and conducting the science that is of particular and immediate importance to our nation," he said in a speech to the National Press Club.

"The research that we need to do, or can do in a way that gives us a competitive edge."

He added: "Over the past four years, I have had a consistent message -– that science matters.

"And it is too important to leave to chance."

Ry Crozier

Ry Crozier has worked in the technology sector for 16 years, both as a journalist and as a technical PR specialist.

Crozier re-joined iTnews and Information Age in 2015, after previous stints as a journalist at the University of New South Wales, iTnews and Electronics News.